New property investors
Question from Janine updated on 17th July 2012:
We are new property investors. We have equity in our home that we want to use. We are on a revolving mortgage. Do we have to start a new mortage for our rental property or can we put it onto our existing revolving mortgage as it already works so well?
Our expert Kris Pedersen responded:
My recommendation is that you use a portion of the revolving credit funds to provide a deposit and use a second bank to provide the remainder. The second bank would take the property as security. This stops the two properties from being cross secured. Without knowing more I would suggest if you have enough put in a 20% deposit as that will allow you to access interest only funds at competitive pricing (as long as you meet the remainder of the criteria). If you put in less the funding may be more expensive and less flexible.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz